Tuesday, October 21, 2025
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Employee Compensation Rises by 13% in India

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Recent data reveals a significant increase in employee compensation across various sectors in India.

According to the Annual Survey of Unincorporated Sector Enterprises (ASUSE) 2023-24, average annual employee compensation at unincorporated enterprises rose by 13% to ₹1.4 lakh per head for the period October 2023-September 2024.

This growth reflects a positive trend in the Indian job market, despite ongoing economic challenges.

Employee Compensation: Sector-wise Compensation Growth

The compensation growth varied across different sectors, with manufacturing leading the way at a 16.1% increase.

The trade sector followed closely with a 14% rise, while the services sector saw a 10.4% increase.

This disparity highlights the varying economic dynamics within each sector and the impact of industry-specific factors on employee wages.

The data also shows a significant divergence between the compensation of formal and informal workers.

Formally hired workers in the services sector experienced a 16.9% increase in their average emoluments, reaching ₹3 lakh in the period under review.

In contrast, the manufacturing sector saw the highest growth for informal workers, with a 15.3% increase in emoluments.

This disparity underscores the need for policies that address wage inequalities and promote fair compensation practices.

Impact on Labor Productivity

Interestingly, while the manufacturing sector saw the highest compensation growth, it also experienced a decline in labor productivity.

The gross value added (GVA) per worker in the manufacturing sector fell by 4.2% in 2023-24 compared to the previous year.

Conversely, the trade and services sectors saw increases in GVA per worker, with trade rising by 10.6% and services by 6.1%.

This indicates that higher compensation does not always translate to increased productivity, highlighting the complex relationship between wages and labor efficiency.

Despite the overall positive trend in compensation growth, challenges remain.

Rising living costs and inflation continue to impact workers’ purchasing power, and there is a growing demand for fairer distribution of corporate earnings.

Companies must balance the need to attract and retain talent with the economic realities of their industries, ensuring that wage policies are sustainable and equitable.


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Sahiba Sharma
Sahiba Sharmahttps://sightsinplus.com/
Sahiba Sharma, Senior Editor - Content at SightsIn Plus